Recent Shifts in Mortgage Rates and Home Prices

Mortgage rates saw a minor decrease this week, with the average 30-year fixed rate dropping to 6.89%. This rate is slightly below the average for May, and marks a small but welcome relief for buyers navigating the current housing market. While rates have lowered, home prices continue to rise, increasing by 5.3% year over year in April. However, the pace of price increases is slowing, with future growth projected to soften further.

Increased Housing Inventory: 

The number of single-family homes on the market has significantly increased, with over 600,000 homes currently available, marking a 39% increase from last year. This increase in inventory is particularly noticeable in states like Texas, California, and Florida.

Economic Indicators to Watch: 

The upcoming U.S. Bureau of Labor Statistics' consumer price index and the Federal Reserve's monetary policy statement on June 12 will be critical in determining future interest rate movements. Current market predictions do not foresee a rate cut in the near future, with the Fed's decision likely influenced by inflation trends.

The Bottom Line

While mortgage rates have seen a slight decrease, the overall cost of buying a home remains high due to continuing price increases and substantial inflation. Buyers may find some opportunities due to increased inventory, but the market remains challenging.

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